Dangote, BUA, Other Cement Manufacturers Declare N710bn Profit, Set New Price after Meeting With FG

• Nigeria’s cement makers have announced a profit of N710 billion in the past year
• Dangote, BUA and Lafarge Africa declared profits despite forex losses, which affected their operations
• Dangote led the other two manufacturers with about N2.21 trillion in 2023 as the company continues its expansion drive

Legit.ng’s Pascal Oparada has reported Tech, Energy, Stocks, Investment and the Economy for over a decade.

Nigeria’s three biggest cement manufacturers - Dangote, BUA, and Lafarge Africa - recorded about N710.3 billion in the past year as hikes in sales and higher prices reduced pressures on operations.

The three manufacturers, however, incurred huge forex losses, which affected their net profits.

Dangote, others get exclusive manufacturing rights

The firms’ total sales increased from N2.35 trillion in 2022 to N3.076 billion in 2023. Their operating expenses rose from N799.79 billion in 2022 to N910.99 billion in 2023.

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Profit before tax, however, declined from N713.89 billion in 2022 to N710.03 billion in 2023. The decline in pre-tax earnings was due to BUA Cement, which saw a reduction in profitability during the review period.

After taxes, the companies’ net profit rose from N536.97 billion in 2022 to N576.17 billion in 2023.

The three manufacturers enjoy exclusive cement production and sales and have come under scrutiny and criticism from Nigerians as the price skyrocketed in one month.

Nigeria banned the importation of cement under the backwards integration project, leaving the three biggest producers as the country’s only source of cement needs.

The average price of cement has more than doubled from N4,000 to about N8000, following the rise in demand.

The Nation reports that the Nigerian Institute of Quantity Surveyors (NIQS) estimated that the price of 50kg of cement increased by about 150% from N4,500 in January 2024 to N13,000 in February.

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Following public outcry and a meeting with the Nigerian government, the manufacturers agreed to set the average price of the product at N7,000 per 50kg of cement.

Dangote leads BUA, Larfarge in profit

An analysis of the companies showed that Dangote Cement had more than two-thirds of the market share. Its turnover rose from N1.62 trillion in 2022 to N2.21 trillion in 2023.

The company’s operating profit jumped from N585.88 billion in 2022 to N734.27 billion in 2023. Pre-tax profit rose from N524 billion to N553.10 billion, while profit after tax increased from N382.31 billion to N455.58 billion.

Also, Dangote raised its share dividends by 50% at N30 per share following the company's impressive showing at NGX.

The company is also Nigeria's most capitalised company, with N13 trillion in market cap.

Lafarge Africa saw its sales rise from N373.24 billion in 2022 to N405.50 billion in 2023. Its operating profit spiked from N84.19 billion to N102.02 billion.

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Pre-tax profit rose from N69.74 billion to N80.7 billion, while its net profit dipped from N53.65 billion to N51.14 billion.

BUA Cement grew its sales from N361 billion in 2022 to N460 billion in 2023. Its profit declined from N129.15 billion to N67.23 billion, while net profit dipped from N101.01 billion to N69.5 billion.

BUA Cement’s performance was reportedly affected by forex losses, going from N5.50 billion in 2022 to N69.96 billion in 2023.

Price list of Dangote, BUA, Lafarge

Legit.ng earlier reported that retailers of significant cement producers in the country have continued to sell the commodity at high prices despite a recent agreement between manufacturers and the federal government of Nigeria.

Dangote, Lafarge, BUA, and other cement producers had agreed to sell 50kg bag of cement between N7,000 and N8,000.

This was agreed during a meeting initiated by the minister of works, David Umahi, attended by his counterparts from the Ministry of Industry, Trade, and Investment, including Doris Uzoka-Anite, in Abuja on Monday, February 19, 2024.

Source: Legit.ng